Disclosure of information to Australian Taxation Office about borrowers who are, or may be, overseas-based

(Clauses 26 and 73)

Summary of proposed amendment

The proposed amendment to the Student Loan Scheme Act 2011 will give effect in domestic law to the Arrangement for the Exchange of Information regarding New Zealand Student Loans, which was signed by the Commissioner of Taxation (Australia) and the Commissioner of Inland Revenue (New Zealand) in March 2015. It will prescribe what information may be communicated to the Australian Taxation Office and who may receive the information. An amendment to the Tax Administration Act 1994 will create an additional exception to taxation secrecy provisions to allow the two organisations to communicate this information in accordance with the Arrangement.

Application date

The amendment will come into force on the date of enactment.

Key features

Proposed new section 209A sets out the purpose of the exchange of information, which is to facilitate the exchange of information between Inland Revenue and the Australian Taxation Office in order to verify contact details of New Zealand student loan borrowers who are, or may be, overseas-based so the student loan scheme can be administered in relation to those borrowers.

It limits who in the Australian Taxation Office is authorised to receive the information from the Commissioner of Inland Revenue.

The information that may be provided by the Commissioner is prescribed and must be relevant for the purposes.

The requirement in the Tax Administration Act 1994 for officers to maintain secrecy will be amended by providing a new exception in section 81(4)(gbb) of the Tax Administration Act.

Background

One of the keys to collecting overdue student loan repayments is holding up-to-date contact details for defaulters. Not having contact details makes engaging with overseas-based borrowers, many of whom are believed to be living in Australia, difficult.

The proposed information exchange would allow Inland Revenue to receive up-to-date contact details for New Zealand student loan borrowers residing in Australia through matching borrower details against the Australian Taxation Office database of Australian taxpayers. Inland Revenue would then be able contact those individuals to keep them engaged with their loan obligations and, where appropriate, recover outstanding student loan repayment amounts.